Wall Street reacted unhappily to a report published in The Wall Street Journal addressing insider concerns about accounting practices at Cerner. The company's shares, which have been close to the $100 mark for much of the last month, fell as much as 11 percent before recovering later in the day. "Long & Short" columnist Jesse Esinger quoted analysts at three forensic accounting firms--Assay Research, Glass Lewis and Gradient--which have all raised questions about the company's accounting practices.
After the close of trading, Cerner announced a long anticipated stock split, which was approved by its board Tuesday. Cerner CFO Marc Naughton responded to the Journal report by questioning the validity of the accounting firms assessments, saying that the negative reviews came from firms that traditionally "cater to short sellers." By this morning, defenders were rallying to the company's cause, noting that the charges "have been around a long time" and that "the market has a tendency to overreact," particularly to charges involving accounting problems.
- see this article from The Wall Street Journal (sub. req.)
- see this article from The Kansas City Star